Guyana’s Vice President Dr. Bharrat Jagdeo told reporters on Thursday that the government was intent on ensuring Guyanese could participate in the country’s maiden bid round and this resulted in a decision being made to forego the requirement of experience. The Vice President pointed out too that the severity of the financial penalties for those who fail to carry out their work programme played a key role in this decision.
During the government’s deliberation on the matter, Mr. Jagdeo pointed out that there was an argument that foreigners would be given an advantage to the exclusion of locals, once experience came into play.
“So, we decided deliberately…that because the financial penalties are so severe, we will forego the experience because…once they pay their money upfront, they can choose to have partnerships with whomever they wish, but the state will earn a significant amount of money,” he said.
Observers say under these circumstances, locals partnering with experienced players in the industry could set the stage for the successful execution of work programmes.
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The Vice President added that there will be a short period of time in which companies can hold these assets. “And if they don’t do what they said they would do, there will be a penalty for doing so, which is the improvement… So, we decided to forego the experience…not to disadvantage locals in the bidding process.”
Mr. Jagdeo also pointed out that the review process by the government’s consultants revealed shortcomings in many bids, except for those from two consortia, led by industry giants TotalEnergies and ExxonMobil.
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“Every other assessment for all the other blocks identified weaknesses in the submissions…. If you look at all the weaknesses, you would have never awarded anything else, only to the two big companies,” he said.
He elaborated on the nature of the weaknesses, stating, “Many of them had not had any major track record in working in, not just shallow waters, but, like, the local group [Sispro] put in a bid for deepwater, which is complex.”
Despite the weaknesses in their submissions, Mr. Jagdeo said the government decided to award the blocks, because those winning bidders would bear the risk, anyway. Negotiations with the winning bidders are ongoing.
